Category

Keith Fitz-Gerald

The Fed

What the Fed Taper Means for Markets and Your Money

I didn't think it would happen, but Fed Chairman Ben Bernanke up and did "it" a few minutes ago.

He announced the "Fed taper" – the Fed will cut its bond buying by $10 billion a month (to $75 billion) beginning in January.

I think there are a few points to consider about Bernanke's move. I want talk briefly about those, and then highlight what this news of a Fed taper means for your money.

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U.S. Economy

Don't Fall for This New Old Trick

Kmart has joined a long and "distinguished" list of retail chains who offer a rent-to-own program.

It's a sign of the times… Only, rather than being a sign of economic recovery, it's a sign of retail desperation.

Ostensibly, these programs are intended to benefit cash-strapped consumers who couldn't otherwise afford to buy big-ticket items. In reality, the program turns consumer goods like a $300 television into a $415 purchase, according to Bloomberg.

Talk about "the vig" …The imputed interest rate is more than 100%, annually.

It's absolutely appalling, and it ranks right up there with the exploitive subprime lending practices that lead to the financial crisis.

And we're not falling for it...

Tech Investing

4D Printing Potential Makes Me Drool

After more than 30 years in the markets, I've seen all kinds of new technologies that are supposed to change the world. Most are pumped by little-known companies with overly hyped marketing, aggressive underwriters, and little more than vaporware. To say I'm jaded would be an understatement.

But I ran across something recently that positively made my mouth drop.

We already know about 3D printing. It's all the rage right now, because you can buy a printer for a few thousand bucks and cook up whatever your computer can plot.

But 4D printing?

I don't know whether to be terrified or excited as all hell about this.

Probably a little of both...

Interest Rates

Fed Strategy from Mohammed Ali

Bernanke's actions last week – failing to taper, yet still trying to maintain the illusion that QE is a good thing – are setting up a one-two punch that's not unlike boxing champion Mohammed Ali's famous "float like a butterfly, sting like a bee" approach.

If you recall, Ali was a master of the combination – some say the best ever. He loved to bring his opponents in close. Ali could see through the duplicity of his opponents' strategy and land punches that won decisively.

Ali did that using combinations that were based in fighting terms on two contrasts: high-low or short-long, or even left and right. He pressed every advantage he could find, even when others thought there were none to be had. Knowing he wanted to go the full 15 rounds, Ali developed a strategy that would become known as the "rope-a-dope" as a means of tiring out his opponents early on, then vanquishing them in later rounds when the fight really began.

I think we should take a page from Ali's playbook and split the "fight" Bernanke's presented us with into two distinct time zones: the current "round," and those that happen down the line. One short. One long.

Is that possible?

Absolutely. What's more, it's easy to do.

First, though, put yourself in Bernanke's place...

Tech Investing

Microsoft: Look at This Chart Before You Decide

Judging from the 7.28% "Ballmer Bounce" that followed his announcement, the markets love the idea of long-suffering Microsoft CEO Steve Ballmer stepping down.

So do a lot of investors who believe now – finally – it's time to buy Microsoft.

But is it?

Can the company bring in a new CEO with vision? Can it finally begin to understand content? And is it willing to jettison employees and products that aren't "worth" what the legacy suggests?

I could write you some long, eloquent essay on the merits of corporate turnarounds.

Instead, I'm going to show you one simple chart...

China

I Just Uncovered Some Shocking Numbers About China

There are few things more exciting in the investment business than finding a golden opportunity staring you in the face.

That's why I do a lot of research. Because I know that the more I dig, the greater the chance I will find something that others miss, that leads to big opportunity.

Just like when I revisited China's recent economic data, looking for something in there that indicates whether the country's economy is any closer to reviving its engine of growth.

And its stock market, too.

The Chinese stock market has fallen 40.9% since August 2009, leading Oppenheimer to refer to it as a "dead animal" and millions of investors to conclude it's a lost cause.

All the more reason to dig…

Hot Stocks

How to Find the Best Stocks to Buy in a Stock Market Sell-Off

A stock market sell off can be the best time to hunt for stocks to buy. Stocks can slide 10% to 20% before it's all said and done.

But the markets' upward bias means money is always going to look for a place to go. When others are panicking, savvy investors keep their cool and swoop in to have their fill.

The question is, which stocks should you buy in these sell offs?

Money Morning Chief Investment Strategist Keith Fitz-Gerald sorts the good from the bad from the ugly, and tells us where to be when the money comes back home.

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